The attack on Saturday is believed to be an assassination attempt against Islamic Jihad members Aziz al-Shami and Khalil al-Basyuni.
"Aziz Shami, 37, died of his injuries shortly after being admitted to the Shifa Hospital in Gaza," Dr Bakr Abu Safia, told reporters.
Our correspondent said the targeted Jihad members may have heard the helicopters overhead and managed to get out of their car seconds before a missile hit their vehicle in the busy al-Wihda Street of central Gaza.
However, they were seriously injured and were rushed to hospital. Several passers-by, including the boy who later died, were hit by shrapnel.
The boy, Tariq al-Susi, was identified from textbooks in his bag. He was on his way home from school.
"I heard the three helicopters. I saw them overhead and suddenly a big explosion happened," witness Ahmad Nihal told Reuters.
"I saw the car catch fire. The driver had lost his leg which was lying outside the car," Nihal added.
Tariq al-Susi, killed in attack, was
on his way home from school
Israel has killed about 140 Palestinian activists in airborne missile attacks on their cars since the Palestinian uprising or Intifada began in September 2000.
The strikes, which have also killed more than 110 bystanders and left hundreds others injured, have been widely condemned by the international community.
An Israeli army spokesperson had no immediate comment.
An Islamic Jihad leader, Nafiz Azzam, has condemned the attack, saying it represents the Israeli military's continuous aggression against the people of Palestine and not just his movement.
"The attack is a message from Israel that it will continue its violent policy against the Palestinians," Azzam told Aljazeera's satellite channel.
"The attack is a message form Israel that it will continue its violent policy against the Palestinians"
An Islamic Jihad leader
Azzam has said he believes Palestinian resistance factions should sit with the Palestinian Authority to produce a joint political programme to address the difficult situation facing Palestinians.
"We should have a united political stance against the escalating Israeli violence on Palestinians," he said.
Azzam also slammed the so-called road map to peace, saying it would never be applied. "The road map would fail just like many previous internationally-backed peace projects," he stressed.